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Ontario to tax non-resident foreign housing buyers 15%

Moments after introducing a package of measures designed to cool the GTA’s red-hot housing market, Premier Kathleen Wynne conceded she’s open to doing more if her plan doesn’t work.

Wynne made the much-anticipated announcement on the housing market and new rent controls with condos in one of Toronto’s trendiest neighbourhoods as her backdrop.

The 16 measures include the imposition of a 15% foreign speculators tax and closure of a loophole that allowed landlords to raise rent by any amount on units built after 1991.

Wynne acknowledged that the government will wait and see what impact the measures will have and wouldn’t rule out taking further action, if necessary.

“We’re going to continue to pay close attention to what happens in the housing market,” she said. “There’s nothing here that gets changed and then that’s it ... If there’s more that we need to do, if there’s changes we need to make, then we will make them.”

Wynne stressed that the changes are being made to calm the frenetic market and establish fairness for those trying buy a home. In the GTA, sale prices have skyrocketed by 33% in one year.

The changes are not about addressing her poor approval numbers, she insisted, adding, “my objective is to make sure what we do helps people.”

Progressive Conservative MPP Ernie Hardeman said the government is wrong if it thinks a new tax will address the concerns of those trying to get into the market.

“The problem is red tape in the development industry and we just are not producing the units we need so the units that are available people are paying out-of-world prices to get those,” he said.

NDP MPP Peter Tabuns slammed the government failing to move faster to address the rent control loophole. He introduced a private member’s bill weeks ago which would have done the same thing as the Liberal’s plan.

“I just wish they’d moved months earlier on the rental rules to avoid a lot of people getting hurt,” he said.

Prime Minister Justin Trudeau said Thursday that Ottawa must exercise caution before implementing any measures to address Toronto’s booming market.

“There’s a recognition that the levers that the federal government has cover the entire country and the housing market in Vancouver or Toronto is somewhat different than that in Halifax or Saskatoon or even Montreal,” Trudeau said.

— With files from The Canadian Press.

The Liberal government’s plan to cool the GTA housing market and introduce greater rent control is receiving mixed reviews.

The plan, announced Thursday by Premier Kathleen Wynne, was eagerly awaited by a wide range of associations directly impacted by the volatile market. Here are some of the reactions to the measures:

•Jim Murphy, CEO of the Federation of Rental-housing Providers of Ontario: “We provided solutions (on rent control) but the government didn’t want to listen unfortunately. We could have found a real practical alternative ... so that this didn’t occur and so that we still have room for different people renting.”

•Tim Hudak, CEO, Ontario Real Estate Association: “We’re actually seeing new market activity as a result of the government even talking about these measures ... Anecdotally, talking to a lot of realtors in the GTA, they’re seeing more houses come onto the market as some people are saying, ‘Maybe now’s the time to cash in and move to a smaller town and bank the extra money.’ We’re seeing buyers being more cautious. I think they’re already having an effect.”

•Jan Da Silva, CEO Toronto Region Board of Trade: “We have mixed feelings about what was announced. This is because we have continued to lobby all levels of government that the solution is about more supply ... Releasing the government-owned land is great and necessary, but let’s follow that through with pre-zoning and a fast-tracked development path.”

•Joe Vaccaro, CEO, Ontario Home Builders’ Association: “We are encouraged by some of the resources they’re going to put forward on the supply side ... Our members build 95% of the new housing supply in the system. Our view of the world is if you want to stabilize the marketplace, it’s going to be about bringing those development approvals to the market.”

LIST OF PROPOSED HOUSING MEASURES

The Ontario government has announced what it calls a comprehensive housing package aimed at cooling a red-hot real estate market. Here are the 16 proposed measures:

— A 15-per-cent non-resident speculation tax to be imposed on buyers in the Greater Golden Horseshoe area who are not citizens, permanent residents or Canadian corporations.

— Expanded rent control that will apply to all private rental units in Ontario, including those built after 1991, which are currently excluded.

— Updates to the Residential Tenancies Act to include a standard lease agreement, tighter provisions for “landlord’s own use” evictions, and technical changes to the Landlord-Tenant Board meant to make the process fairer, as well as other changes.

— A program to leverage the value of surplus provincial land assets across the province to develop a mix of market-price housing and affordable housing.

— Legislation that would allow Toronto and possibly other municipalities to introduce a vacant homes property tax in an effort to encourage property owners to sell unoccupied units or rent them out.

— A plan to ensure property tax for new apartment buildings is charged at a similar rate as other residential properties.

— A five-year, $125-million program aimed at encouraging the construction of new rental apartment buildings by rebating a portion of development charges.

— More flexibility for municipalities when it comes to using property tax tools to encourage development.

— The creation of a new Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions.

— An effort to understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market.

— A review of the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions.

— The launch of a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures and any additional steps that are needed.

— Education for consumers on their rights, particularly on the issue of one real estate professional representing more than one party in a real estate transaction.

— A partnership with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.

— Set timelines for elevator repairs to be established in consultation with the sector and the Technical Standards & Safety Authority.

— Provisions that would require municipalities to consider the appropriate range of unit sizes in higher density residential buildings to accommodate a diverse range of household sizes and incomes, among other things.